Demand increase raises quantity supplied

Steps:

• Analyze each option's impact on housing market supply or demand.
• Policies affecting costs or incentives directly shift supply curve; buyer aids shift demand.
• Higher demand raises equilibrium price, prompting more quantity supplied along supply curve.
• Select option that boosts demand without harming supply.

Why A is correct:

• Helps buyers on modest incomes, increasing demand (rightward demand shift per law of demand), raising price and thus quantity supplied (movement up supply curve).

Why the others are wrong:

• B restricts rents, discouraging builders and shifting supply left (reduced quantity supplied).
• C raises building costs, shifting supply left (higher costs reduce quantity supplied).
• D removes builder subsidy, increasing costs and shifting supply left (less incentive to supply).

Final answer: A